Commerce

Abstract

In an economy based on the division of labor, commerce takes on the task to balance the spatiotemporal, qualitative and quantitative friction between production and consumption. More generally, commerce is any exchange of goods and services. This typically occurs along a market hierarchy starting with the manufacturer, on to the wholesaler, then retailer and, eventually the product or service is purchased by the consumer. Market dynamics and competition are examined based on such concepts as the division of labor, exchange and competition. One theory is highlighted: Transaction Cost Theory, especially as it allows us to focus on transaction and coordination costs. Particular attention is paid to markets and electronic markets. The efficiency of electronic markets, especially their gain in efficiency over traditional markets is recognized. 1t is emphasized that the very essence of an electronic market is the human being, i.e. man as actor. Lastly, the author presents a model of how value added comes about in commerce: Value comes from business processes with proper alignment of information and communication technologies, business strategy/goals and business processes.